WBK Industry News - Federal Regulatory Developments

Wells Fargo Agrees to Settle Claim to End Suit by California’s Attorney General

On March 28, Wells Fargo settled a suit brought by the California Attorney General and five other California state agencies (including the office of Los Angeles County District Attorney, the Consumer Protection Divisions of Alameda County District Attorney, Riverside County District Attorney, San Diego County District Attorney and Ventura County District Attorney), alleging that the bank failed to make a clear, conspicuous and accurate disclosure to customers that their phone calls were being recorded, in violation of sections 632 and 632.7 of the California Penal Code. Wells Fargo agreed to pay $7,616,000 in civil penalties and $384,000 in investigative costs, both of which will be divided equally among the six agencies. The bank will also contribute $500,000 to a pair of statewide organizations dedicated to advancing consumer protection and privacy rights, according to the judgment.

According to the California Attorney General’s press release, California has some of strongest privacy laws in the country. The press release also stated that in California, each party to a confidential conversation must be advised at the outset if a call is being recorded, so that the individual can object or terminate the call if he or she does not wish to be recorded. In this case, the California Attorney General and the other state agencies alleged that Wells Fargo’s call recording practices did not timely and adequately notify customers that the calls were being recorded.

The parties’ agreement is reflected in the stipulated final judgment, under which Wells Fargo — without admitting liability — is required to comply with California’s standards for recording confidential communications by making “clear, conspicuous, and accurate” disclosures at the beginning of any conversation between the bank and its customers.

Wells Fargo has also agreed to implement an internal compliance program to ensure that the policy changes are made. Specifically, the bank will conduct periodic internal testing of the compliance of its employees and agents who communicate confidentially with consumers in California and will designate an officer, manager, supervisor or other representative who will have oversight responsibility over its compliance with the judgment.

The agencies also commented in the press release that this settlement reflects California’s interest in continuing to carefully protect the privacy of its citizens.

The California Attorney General’s Press Release is available at: https://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-district-attorneys-announce-85-million.